Chancellor George Osborne has unveiled the biggest UK spending cuts for decades, with welfare, councils and police budgets all hit.

The pension age will rise sooner than expected, some incapacity benefits will be time limited and other money clawed back through changes to tax credits and housing benefit.

A new bank levy will also be brought in - with full details due on Thursday.

Mr Osborne said the four year cuts were guided by fairness, reform and growth.

But shadow chancellor Alan Johnson, for Labour, called the review a "reckless gamble with people's livelihoods" which risked "stifling the fragile recovery" - a message echoed by the SNP, despite smaller than expected cuts in Scotland.

Mr Osborne ended his hour-long Commons statement by claiming the 19% average cuts to departmental budgets were less severe than expected. This is thanks to an extra £7bn in savings from the welfare budget and a £3.5bn increase in public sector employee pension contributions.
'Frontline cuts'

The chancellor claimed it meant his savings were less than the 20% cuts Labour had planned ahead of the general election.

BBC Economics Editor Stephanie Flanders said that, at first glance, "the cuts to the welfare benefit are regressive, in the most basic sense of costing families in the lower half of the income distribution more".
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